United Community Banks (UCB) 8-K United Community Banks, Inc. Announces Results for Fourth Quarter 2008

Exhibit 99.1

For Immediate Release

For more information:
Rex S. Schuette
Chief Financial Officer
(706) 781-2266
Rex_Schuette@ucbi.com

UNITED COMMUNITY BANKS, INC. ANNOUNCES
RESULTS FOR FOURTH QUARTER 2008

BLAIRSVILLE, GA — January 23, 2009 — United Community Banks, Inc. (NASDAQ: UCBI) today announced a net loss of $46.7 million, or 99 cents per diluted share, for the fourth quarter of 2008, compared to net income of $4.2 million, or 9 cents per diluted share, for the same time last year. For the year 2008, the company had a net loss of $63.5 million, or $1.35 per diluted share, compared to net income of $58.0 million, or $1.24 per diluted share, for 2007.

“Challenges in the housing market, particularly in Atlanta, continued to have a significant impact on our loan portfolio and earnings in the fourth quarter,” said Jimmy Tallent, president and chief executive officer. “We saw a rise in the level of classified and non-performing assets and further deterioration in property valuations. While we remain committed to moving through this down cycle as quickly as possible, it is clearly a very difficult environment.”

For the fourth quarter of 2008, loans were $5.7 billion, down $224 million from a year ago and down $125 million on a linked-quarter basis, reflecting the company’s continuing efforts to reduce exposure to the residential construction and housing markets. At December 31, 2008, residential construction loans were $1.5 billion, or 26 percent of total loans, a decrease of $350 million from a year ago and $117 million from the third quarter.

Taxable equivalent net interest revenue of $51.9 million reflected a decrease of $6.9 million from the third quarter of 2008 and $17.9 million from the fourth quarter of 2007. Taxable equivalent net interest margin was 2.70 percent compared with 3.17 percent for the third quarter of 2008 and 3.73 percent for the fourth quarter of 2007.

1

“Margin compression was primarily driven by actions taken late in the third quarter and early in the fourth quarter to build liquidity in a very fragile banking environment,” stated Tallent. “Banks were not lending to other banks and consumers were concerned about bank failures and FDIC insurance levels on their deposits. About two-thirds of the margin compression was due to our aggressive actions to build liquidity and the remaining third was due to the higher level of non-performing assets and the steep decline in the targeted federal funds rate impacting our asset sensitive balance sheet,” added Tallent.

“With liquidity improving late in the quarter we are letting brokered deposits run-off,” stated Tallent. Also, we have lowered our deposit pricing and widened the credit spreads on our prime based loans. With the actions we have taken and liquidity remaining stable, we expect a measurable improvement in our margin, approaching 3 percent by the end of the first quarter of 2009.”

The fourth quarter provision for loan losses was $85.0 million. Net charge-offs for the quarter were $74.0 million compared with $55.7 million for the third quarter of 2008. At quarter-end, non-performing assets totaled $250.5 million compared with $177.7 million at September 30, 2008. The ratio of non-performing assets to total assets at year-end and at the end of the third quarter was 2.94 percent and 2.20 percent, respectively.

“The down economic cycle continued to impact our credit quality, particularly within the Atlanta residential construction portfolio,” stated Tallent. “The rise in non-performing assets was primarily the result of continued deterioration in the Atlanta housing market and softened demand from buyers, given the deterioration of pricing and valuations. The environment is not getting better. Despite this, our strategy will be the same to recognize and move troubled assets through our process as quickly as possible. We expect to see the challenges continue in the quarters ahead and charge-offs to be elevated over historical levels as we work through our problem credits. But at all times, we will make the best economic decision for our company.”

2

Fee revenue of $10.7 million reflected a decrease of $5.4 million from the fourth quarter of 2007. Service charges and fees on deposit accounts of $7.7 million decreased $608,000 due to lower activity and transaction charges. Consulting fees were down $1.3 million from last year primarily due to the advisory consulting services’ assistance in United’s corporate-wide initiative to improve profitability and weakness in the financial services industry that affected sales efforts and delayed consulting contracts. The advisory consulting services were performed by a wholly-owned subsidiary and, therefore, eliminated from the consolidated fee revenue. “Late in the fourth quarter, we took an opportunity to lower funding costs by prepaying higher-rate Federal Home Loan Bank advances,” stated Tallent. “Securities gains of $838,000 partially offset $2.7 million in charges from the prepayment of the advances.” Other fee revenue of $1.4 million declined $684,000 due to lower earnings on bank-owned life insurance assets.

Operating expenses of $52.4 million reflected an increase of $3.1 million from the fourth quarter of 2007. This increase was primarily due to higher foreclosed property costs of $1.4 million and an increase in foreclosure-related professional legal fees of $504,000 and the FDIC increasing insurance premiums by $879,000. Salaries and employee benefit costs of $24.4 million declined $2.7 million from last year due to lower incentive compensation. This decrease was offset by an increase in other expenses of $3.1 million, including a $2.4 million accrual for contested costs on bank-owned life insurance assets and losses on deferred compensation assets of $700,000.

United continues to maintain a very strong capital position, which was bolstered by the completion of the sale on December 5, 2008 of $180 million in preferred stock and warrants to the U.S. Treasury through its Capital Purchase Program. In addition, the company privately placed $13 million of trust preferred securities on October 31, 2008. At December 31, 2008, the company’s capital ratios were as follows: Tier I Risk-Based Capital of 11.2 percent; Leverage of 8.3 percent; and Total Risk-Based of 13.9 percent. Also, the average tangible equity-to-assets ratio was 6.6 percent and the average tangible common equity-to-assets ratio was 6.2 percent.

“We remain firmly committed to a strategy of aggressive disposition of problem credits, as we believe moving through this credit cycle as quickly as possible is the best course of action,” Tallent said. “Our strong capital position enables us to absorb losses without impairing the company’s financial soundness.”

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“In the coming year, we will be intently focused on working through this credit cycle, improving our margin, growing core deposits and reducing expenses,” Tallent concluded.

Conference Call

United Community Banks will hold a conference call today, Friday, January 23, 2009, at 11 a.m. ET to discuss the contents of this news release and to share business highlights for the quarter. The telephone number for the conference call is (877) 723-9518 and the pass code is “UCBI.” The conference call will also be available by web cast within the Investor Relations section of the company’s web site atwww.ucbi.com.

About United Community Banks, Inc.

Headquartered in Blairsville, United Community Banks is the third-largest bank holding company in Georgia. United Community Banks has assets of $8.5 billion and operates 27 community banks with 107 banking offices located throughout north Georgia, the Atlanta region, coastal Georgia, western North Carolina and east Tennessee. The company specializes in providing personalized community banking services to individuals and small to mid-size businesses. United Community Banks also offers the convenience of 24-hour access through a network of ATMs, telephone and on-line banking. United Community Banks common stock is listed on the Nasdaq Global Select Market under the symbol UCBI. Additional information may be found at the company’s web site atwww.ucbi.com.

Safe Harbor

This news release contains forward-looking statements, as defined by Federal Securities Laws, including statements about financial outlook and business environment. These statements are provided to assist in the understanding of future financial performance and such performance involves risks and uncertainties that may cause actual results to differ materially from those in such statements. Any such statements are based on current expectations and involve a number of risks and uncertainties. For a discussion of some factors that may cause such forward-looking statements to differ materially from actual results, please refer to the section entitled “Forward-Looking Statements” on page 4 of United Community Banks, Inc.’s annual report filed on Form 10-K with the Securities and Exchange Commission.

# # #

(Tables Follow)

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Selected Financial Information

																Fourth
	2008												2007			Quarter			For the Twelve						YTD
(in thousands, except per share	Fourth			Third			Second			First			Fourth			2008-2007			Months Ended						2008-2007
data; taxable equivalent)	Quarter			Quarter			Quarter			Quarter			Quarter			Change			2008			2007			Change
INCOME SUMMARY
Net interest revenue		51,873			58,791			61,753			66,287			69,730			(26)	%		238,704			274,483			(13	)%
Provision for loan losses (1)		85,000			76,000			15,500			7,500			26,500						184,000			37,600
Fee revenue		10,718			13,121			15,105			14,197			16,100			(33	)		53,141			62,651			(15	)
Total operating revenue		(22,409	)		(4,088	)		61,358			72,984			59,330			(138	)		107,845			299,534			(64	)
Operating expenses		52,439			56,970			49,761			47,529			49,336			6			206,699			190,061			9
(Loss) income before taxes		(74,848	)		(61,058	)		11,597			25,455			9,994		NM				(98,854	)		109,473		NM
Income tax expense (benefit)		(28,101	)		(21,184	)		4,504			9,377			3,960						(35,404	)		40,482
Net operating (loss) income		(46,747	)		(39,874	)		7,093			16,078			6,034		NM				(63,450	)		68,991		NM
Fraud loss provision, net of tax (1)		—			—			—			—			1,833						—			10,998
Net (loss) income		(46,747	)		(39,874	)		7,093			16,078			4,201		NM				(63,450	)		57,993		NM
Preferred stock dividends		712			4			4			4			4						724			18
Net (loss) income available to common shareholders	$	(47,459	)	$	(39,878	)	$	7,089		$	16,074		$	4,197		NM			$	(64,174	)	$	57,975		NM
OPERATING PERFORMANCE(1)
Earnings (loss) per common share:
Basic	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.13		NM			$	(1.35	)	$	1.50		NM
Diluted		(.99	)		(.84	)		.15			.34			.13		NM				(1.35	)		1.48		NM
Return on tangible equity (2)(3)(4)	NM		%	NM		%		5.86	%		13.16	%		5.06	%					(12.37)	%		14.23	%
Return on assets (4)	NM			NM				.34			.78			.29						(.76	)		.89
GAAP PERFORMANCE MEASURES
Per common share:
Basic earnings (loss)	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.09		NM			$	(1.35	)	$	1.26		NM
Diluted earnings (loss)		(.99	)		(.84	)		.15			.34			.09		NM				(1.35	)		1.24		NM
Cash dividends declared		—			—			.09			.09			.09		NM				.18			.36			(50	)
Stock dividends declared		.09			.09			—			—			—		NM				.18			—			100
Book value		16.95			17.12			17.75			18.50			17.70			(4	)		16.95			17.70			(4	)
Tangible book value (3)		10.39			10.48			11.03			11.76			10.92			(5	)		10.39			10.92			(5	)
Key performance ratios:
Return on equity (2)(4)	NM		%	NM		%		3.41	%		7.85	%		2.01	%					(7.82)	%		7.79	%
Return on assets		(2.20	)		(1.95	)		.34			.78			.20						(.76	)		.75
Net interest margin (4)		2.70			3.17			3.32			3.55			3.73						3.18			3.88
Efficiency ratio		81.34			79.35			65.05			59.05			57.67						70.49			56.53
Cash dividend payout ratio		—			—			60.00			26.47			100.00						(13.33	)		28.57
Equity to assets		10.08			10.28			10.33			10.30			10.20						10.25			9.61
Tangible equity to assets (3)		6.59			6.65			6.77			6.73			6.58						6.69			6.63
Tangible common equity to assets (3)		6.23			6.65			6.77			6.73			6.58						6.59			6.63
ASSET QUALITY
Allowance for loan losses	$	122,271		$	111,299		$	91,035		$	89,848		$	89,423					$	122,271		$	89,423
Net charge-offs (1)		74,028			55,736			14,313			7,075			13,012						151,152			21,834
Non-performing loans (NPLs)		190,723			139,266			123,786			67,728			28,219						190,723			28,219
OREO		59,768			38,438			28,378			22,136			18,039						59,768			18,039
Total non-performing assets (NPAs)		250,491			177,704			152,164			89,864			46,258						250,491			46,258
Allowance for loan losses to loans (1)		2.14	%		1.91	%		1.53	%		1.51	%		1.51	%					2.14	%		1.51	%
Net charge-offs to average loans (1)(4)		5.09			3.77			.97			.48			.87						2.57			.38
NPAs to loans and OREO		4.35			3.03			2.55			1.50			.78						4.35			.78
NPAs to total assets		2.94			2.20			1.84			1.07			.56						2.94			.56
AVERAGE BALANCES
Loans	$	5,784,139		$	5,889,168		$	5,933,143		$	5,958,296		$	5,940,230			(3	)	$	5,890,889		$	5,734,608			3
Investment securities		1,508,808			1,454,740			1,507,240			1,485,515			1,404,796			7			1,489,036			1,277,935			17
Earning assets		7,662,536			7,384,287			7,478,018			7,491,480			7,424,992			3			7,504,186			7,070,900			6
Total assets		8,449,097			8,146,880			8,295,748			8,305,621			8,210,120			3			8,299,330			7,730,530			7
Deposits		6,982,229			6,597,339			6,461,361			6,051,069			6,151,476			14			6,524,457			6,028,625			8
Shareholders’ equity		851,956			837,487			856,727			855,659			837,195			2			850,426			742,771			14
Common shares — basic		47,844			47,417			47,158			47,052			47,273						47,369			45,948
Common shares — diluted		47,844			47,417			47,249			47,272			47,652						47,369			46,593
AT PERIOD END
Loans	$	5,704,861		$	5,829,937		$	5,933,141		$	5,967,839		$	5,929,263			(4	)	$	5,704,861		$	5,929,263			(4	)
Investment securities		1,617,187			1,400,827			1,430,588			1,508,402			1,356,846			19			1,617,187			1,356,846			19
Total assets		8,520,765			8,072,543			8,264,051			8,386,255			8,207,302			4			8,520,765			8,207,302			4
Deposits		7,003,624			6,689,335			6,696,456			6,175,769			6,075,951			15			7,003,624			6,075,951			15
Shareholders’ equity		989,382			816,880			837,890			871,452			831,902			19			989,382			831,902			19
Common shares outstanding		48,009			47,596			47,096			47,004			46,903						48,009			46,903

(1)	Excludes effect of special $15 million fraud related provision for loan losses recorded in the second quarter of 2007, an additional $3 million provision in the fourth quarter of 2007, and $18 million of related loan charge-offs recorded in the fourth quarter of 2007 which were all related to a failed real estate development and are considered non-recurring.
(2)	Net income available to common shareholders, which excludes preferred stock dividends, divided by average realized common equity, which excludes accumulated other comprehensive income (loss).
(3)	Excludes effect of acquisition related intangibles and associated amortization.
(4)	Annualized.
NM	— Not meaningful.

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UNITED COMMUNITY BANKS, INC.
Selected Financial Information
For the Years Ended December 31,

(in thousands, except per share data;																			5 Year
taxable equivalent)	2008			2007			2006			2005			2004			2003			CAGR(4)
INCOME SUMMARY
Net interest revenue		238,704			274,483			237,880			196,799			152,998			128,089			13	%
Provision for loan losses		184,000			37,600			14,600			12,100			7,600			6,300
Fee revenue		53,141			62,651			49,095			46,148			39,539			38,184			7
Total revenue		107,845			299,534			272,375			230,847			184,937			159,973			(8	)
Operating expenses(1)		206,699			190,061			162,070			140,808			110,974			97,251			16
(Loss) income before taxes		(98,854	)		109,473			110,305			90,039			73,963			62,722		NM
Income taxes		(35,404	)		40,482			41,490			33,297			26,807			23,247
Net operating (loss) income		(63,450	)		68,991			68,815			56,742			47,156			39,475		NM
Fraud loss provision, net of tax		—			10,998			—			—			—			—
Merger-related charges, net of tax		—			—			—			—			565			1,357
Net (loss) income		(63,450	)		57,993			68,815			56,742			46,591			38,118		NM
Preferred stock dividends		724			18			19			23			9			66
Net (loss) income available to common shareholders	$	(64,174	)	$	57,975		$	68,796		$	56,719		$	46,582		$	38,052		NM
OPERATING PERFORMANCE(1)
Earnings (loss) per common share:
Basic	$	(1.35	)	$	1.50		$	1.70		$	1.47		$	1.31		$	1.15		NM
Diluted		(1.35	)		1.48			1.66			1.43			1.27			1.12		NM
Return on tangible equity(2)(3)		(12.37	)%		14.23	%		17.52	%		18.99	%		19.74	%		19.24	%
Return on assets		(.76	)		.89			1.09			1.04			1.07			1.06
Efficiency ratio		70.49			56.53			56.35			57.77			57.65			58.39
Cash dividend payout ratio		(13.33	)		24.00			18.82			19.05			18.32			17.39
GAAP PERFORMANCE
Per common share:
Basic earnings (loss)	$	(1.35	)	$	1.26		$	1.70		$	1.47		$	1.29		$	1.11		NM
Diluted earnings (loss)		(1.35	)		1.24			1.66			1.43			1.25			1.08		NM
Cash dividends declared (rounded)		.18			.36			.32			.28			.24			.20			(2	)
Stock dividends declared		.18			—			—			—			—			—		NM
Book value		16.95			17.73			14.37			11.80			10.39			8.47			15
Tangible book value (3)		10.39			10.94			10.57			8.94			7.34			6.52			10
Key performance ratios:
Return on equity(2)		(7.82	)%		7.79	%		13.28	%		13.46	%		14.39	%		14.79	%
Return on assets		(.76	)		.75			1.09			1.04			1.05			1.02
Net interest margin		3.18			3.88			4.05			3.85			3.71			3.68
Cash dividend payout ratio		(13.33	)		28.57			18.82			19.05			18.60			18.02
Equity to assets		10.25			9.61			8.06			7.63			7.45			7.21
Tangible equity to assets(3)		6.69			6.63			6.32			5.64			5.78			6.02
Tangible common equity to assets(3)		6.59			6.63			6.32			5.64			5.78			6.03
ASSET QUALITY
Allowance for loan losses	$	122,271		$	89,423		$	66,566		$	53,595		$	47,196		$	38,655
Net charge-offs (1)		151,152			21,834			5,524			5,701			3,617			4,097
Non-performing loans (NPLs)		190,723			28,219			12,458			11,997			8,031			6,627
OREO		59,768			18,039			1,196			998			694			962
Total non-performing assets (NPAs)		250,491			46,258			13,654			12,995			8,725			7,589
Allowance for loan losses to loans (1)		2.14	%		1.51	%		1.24	%		1.22	%		1.26	%		1.28	%
Net charge-offs to average loans (1)		2.57			.38			.12			.14			.11			.15
NPAs to loans and OREO		4.35			.78			.25			.30			.23			.25
NPAs to total assets		2.94			.56			.19			.22			.17			.19
AVERAGE BALANCES
Loans	$	5,890,889		$	5,734,608		$	4,800,981		$	4,061,091		$	3,322,916		$	2,753,451			16
Investment securities		1,489,036			1,277,935			1,041,897			989,201			734,577			667,211			17
Earning assets		7,504,186			7,070,900			5,877,483			5,109,053			4,119,327			3,476,030			17
Total assets		8,299,330			7,730,530			6,287,148			5,472,200			4,416,835			3,721,284			17
Deposits		6,524,457			6,028,625			5,017,435			4,003,084			3,247,612			2,743,087			19
Shareholders’ equity		850,426			742,771			506,946			417,309			329,225			268,446			26
Common shares — Basic		47,369			45,948			40,413			38,477			36,071			34,132			7
Common shares — Diluted		47,369			46,593			41,575			39,721			37,273			35,252			6
AT YEAR END
Loans	$	5,704,861		$	5,929,263		$	5,376,538		$	4,398,286		$	3,734,905		$	3,015,997			14
Investment securities		1,617,187			1,356,846			1,107,153			990,687			879,978			659,891			20
Total assets		8,520,765			8,207,302			7,101,249			5,865,756			5,087,702			4,068,834			16
Deposits		7,003,624			6,075,951			5,772,886			4,477,600			3,680,516			2,857,449			20
Shareholders’ equity		989,382			831,902			616,767			472,686			397,088			299,373			27
Common shares outstanding		48,009			46,903			42,891			40,020			38,168			35,289			6

(1)	Excludes pre-tax provision for fraud-related loan losses and related charge-offs of $18 million, or $.24 per diluted common share, recorded in 2007 and pre-tax merger-related charges totaling $.9 million, or $.02 per diluted common share, recorded in 2004 and $2.1 million, or $.04 per diluted common share, recorded in 2003.
(2)	Net income available to common stockholders, which excludes preferred stock dividends, divided by average realized common equity which excludes accumulated other comprehensive income (loss).
(3)	Excludes effect of acquisition related intangibles and associated amortization.
(4)	Compound annual growth rate.
NM	— Not meaningful.

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UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Period-End

	2008								2007		Linked			Year over
	Fourth		Third		Second		First		Fourth		Quarter			Year
(in millions)	Quarter		Quarter		Quarter		Quarter		Quarter		Change(1)			Change
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,627	$	1,604	$	1,584	$	1,526	$	1,476		6	%		10	%
Commercial construction		500		509		522		548		527		(7	)		(5	)
Commercial & industrial		410		425		417		437		418		(14	)		(2	)
Total commercial		2,537		2,538		2,523		2,511		2,421		—			5
Residential construction		1,479		1,596		1,745		1,791		1,829		(29	)		(19	)
Residential mortgage		1,526		1,528		1,494		1,491		1,502		(1	)		2
Consumer / installment		163		168		171		175		177		(12	)		(8	)
Total loans	$	5,705	$	5,830	$	5,933	$	5,968	$	5,929		(9	)		(4	)
LOANS BY MARKET
Atlanta MSA	$	1,706	$	1,800	$	1,934	$	1,978	$	2,002		(21	)%		(15	)%
Gainesville MSA		420		426		422		415		400		(6	)		5
North Georgia		2,040		2,066		2,065		2,071		2,060		(5	)		(1	)
Western North Carolina		810		815		819		816		806		(2	)		—
Coastal Georgia		464		458		436		439		416		5			12
East Tennessee		265		265		257		249		245		—			8
Total loans	$	5,705	$	5,830	$	5,933	$	5,968	$	5,929		(9	)		(4	)
RESIDENTIAL CONSTRUCTION
Dirt loans
Acquisition & development	$	484	$	516	$	569	$	583	$	592		(25	)%		(18	)%
Land loans		153		142		139		130		126		31			21
Lot loans		358		385		401		406		407		(28	)		(12	)
Total		995		1,043		1,109		1,119		1,125		(18	)		(12	)
House loans
Spec		347		393		450		460		473		(47	)%		(27	)%
Sold		137		160		186		212		231		(58	)		(41	)
Total		484		553		636		672		704		(50	)		(31	)
Total residential construction	$	1,479	$	1,596	$	1,745	$	1,791	$	1,829		(29	)		(19	)
RESIDENTIAL CONSTRUCTION — ATLANTA MSA
Dirt loans
Acquisition & development	$	167	$	185	$	232	$	252	$	258		(39	)%		(35	)%
Land loans		56		47		50		50		52		77			8
Lot loans		86		103		117		117		117		(66	)		(26	)
Total		309		335		399		419		427		(31	)		(28	)
House loans
Spec		189		227		271		271		280		(67	)%		(33	)%
Sold		40		49		58		71		77		(73	)		(48	)
Total		229		276		329		342		357		(68	)		(36	)
Total residential construction	$	538	$	611	$	728	$	761	$	784		(48	)		(31	)

⁽¹⁾ Annualized.

7

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Loan Portfolio Composition at Year-End

(in millions)	2008		2007		2006		2005		2004		2003
LOANS BY CATEGORY
Commercial (sec. by RE)	$	1,627	$	1,476	$	1,230	$	1,055	$	966	$	777
Commercial construction		500		527		470		358		239		164
Commercial & industrial		410		418		296		237		212		190
Total commercial		2,537		2,421		1,996		1,650		1,417		1,131
Residential construction		1,479		1,829		1,864		1,381		1,066		763
Residential mortgage		1,526		1,502		1,338		1,206		1,102		982
Consumer / installment		163		177		179		161		150		140
Total loans	$	5,705	$	5,929	$	5,377	$	4,398	$	3,735	$	3,016
LOANS BY MARKET
Atlanta MSA	$	1,706	$	2,002	$	1,651	$	1,207	$	1,061	$	662
Gainesville MSA		420		400		354		249		—		—
North Georgia		2,040		2,060		2,034		1,790		1,627		1,481
Western North Carolina		810		806		773		668		633		548
Coastal Georgia		464		415		358		306		274		222
East Tennessee		265		246		207		178		140		103
Total loans	$	5,705	$	5,929	$	5,377	$	4,398	$	3,735	$	3,016

8

UNITED COMMUNITY BANKS, INC.
Financial Highlights
Credit Quality

	Fourth Quarter 2008						Third Quarter 2008						Second Quarter 2008
	Nonaccrual				Total		Nonaccrual				Total		Nonaccrual				Total
(in thousands)	Loans		OREO		NPAs		Loans		OREO		NPAs		Loans		OREO		NPAs
NPAs BY CATEGORY
Commercial (sec. by RE)	$	15,188	$	2,427	$	17,615	$	9,961	$	854	$	10,815	$	4,610	$	593	$	5,203
Commercial construction		1,513		2,333		3,846		2,924		375		3,299		3,027		1,859		4,886
Commercial & industrial		1,920		—		1,920		1,556		—		1,556		2,950		—		2,950
Total commercial		18,621		4,760		23,381		14,441		1,229		15,670		10,587		2,452		13,039
Residential construction		144,836		48,572		193,408		102,095		32,453		134,548		90,283		22,075		112,358
Residential mortgage		25,574		6,436		32,010		21,335		4,756		26,091		21,792		3,851		25,643
Consumer / installment		1,692		—		1,692		1,395		—		1,395		1,124		—		1,124
Total NPAs	$	190,723	$	59,768	$	250,491	$	139,266	$	38,438	$	177,704	$	123,786	$	28,378	$	152,164
NPAs BY MARKET
Atlanta MSA	$	105,476	$	42,336	$	147,812	$	80,805	$	27,011	$	107,816	$	89,327	$	15,196	$	104,523
Gainesville MSA		16,208		1,110		17,318		15,105		648		15,753		4,885		12		4,897
North Georgia		31,631		12,785		44,416		20,812		8,337		29,149		16,117		8,277		24,394
Western North Carolina		18,509		2,986		21,495		13,432		1,509		14,941		9,838		990		10,828
Coastal Georgia		11,863		138		12,001		3,682		601		4,283		1,575		3,871		5,446
East Tennessee		7,036		413		7,449		5,430		332		5,762		2,044		32		2,076
Total NPAs	$	190,723	$	59,768	$	250,491	$	139,266	$	38,438	$	177,704	$	123,786	$	28,378	$	152,164

	Fourth Quarter 2008					Third Quarter 2008					Second Quarter 2008
			Net Charge-					Net Charge-					Net Charge-
			Offs to					Offs to					Offs to
	Net		Average			Net		Average			Net		Average
(in thousands)	Charge-Offs		Loans(1)			Charge-Offs		Loans(1)			Charge-Offs		Loans(1)
NET CHARGE-OFFS BY CATEGORY
Commercial (sec. by RE)	$	4,460		1.10	%	$	257		.06	%	$	424		.11	%
Commercial construction		1,442		1.14			225		.17			125		.09
Commercial & industrial		3,416		3.24			1,018		.96			398		.38
Total commercial		9,318		1.46			1,500		.24			947		.15
Residential construction		57,882		14.93			50,228		11.94			10,343		2.36
Residential mortgage		5,852		1.52			3,332		.88			2,576		.70
Consumer / installment		976		2.34			676		1.58			447		1.05
Total	$	74,028		5.09		$	55,736		3.77		$	14,313		.97
NET CHARGE-OFFS BY MARKET
Atlanta MSA	$	49,309		10.80	%	$	48,313		10.08	%	$	10,682		2.22	%
Gainesville MSA		7,994		8.60			1,470		1.49			360		.34
North Georgia		9,872		1.91			4,567		.88			1,829		.36
Western North Carolina		2,371		1.16			855		.42			279		.14
Coastal Georgia		3,150		2.70			249		.22			980		.90
East Tennessee		1,332		2.02			282		.43			183		.29
Total	$	74,028		5.09		$	55,736		3.77		$	14,313		.97

⁽¹⁾ Annualized.

9

UNITED COMMUNITY BANKS, INC.
Operating Earnings to GAAP Earnings Reconciliation — Presented Only For Periods Where Non-GAAP
Earnings Measures Are Shown

	2008												2007
	Fourth			Third			Second			First			Fourth			Years Ended December 31,
(in thousands, except per share data)	Quarter			Quarter			Quarter			Quarter			Quarter			2008			2007			2004			2003
Special provision for fraud related loan losses	$	—		$	—		$	—		$	—		$	3,000		$	—		$	18,000		$	—		$	—
Merger-related charges included in expenses:
Salaries and employee benefits — severance and related costs		—			—			—			—			—			—			—			203			135
Professional fees		—			—			—			—			—			—			—			407			885
Contract termination costs		—			—			—			—			—			—			—			119			566
Other merger-related expenses		—			—			—			—			—			—			—			141			502
Total merger-related charges		—			—			—			—			—			—			—			870			2,088
Pre-tax earnings impact of non-operating charges		—			—			—			—			3,000			—			18,000			870			2,088
Income tax effect of special provision		—			—			—			—			1,167			—			7,002			305			731
After-tax effect of special provision	$	—		$	—		$	—		$	—		$	1,833		$	—		$	10,998		$	565		$	1,357
Net Income (Loss) Reconciliation
Operating net income (loss)	$	(46,747	)	$	(39,874	)	$	7,093		$	16,078		$	6,034		$	(63,450	)	$	68,991		$	47,156		$	39,475
After-tax effect of special provision and merger-related charges		—			—			—			—			(1,833	)		—			(10,998	)		(119	)		(566	)
Net income (loss) (GAAP)	$	(46,747	)	$	(39,874	)	$	7,093		$	16,078		$	4,201		$	(63,450	)	$	57,993		$	47,037		$	38,909
Basic Earnings (Loss) Per Share Reconciliation
Basic operating earnings (loss) per share	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.13		$	(1.35	)	$	1.50		$	1.31		$	1.15
Per share effect of special provision and merger-related charges		—			—			—			—			(.04	)		—			(.24	)		(.02	)		(.04	)
Basic earnings (loss) per share (GAAP)	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.09		$	(1.35	)	$	1.26		$	1.29		$	1.11
Diluted Earnings (Loss) Per Share Reconciliation
Diluted operating earnings (loss) per share	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.13		$	(1.35	)	$	1.48		$	1.27		$	1.12
Per share effect of special provision and merger-related charges		—			—			—			—			(.04	)		—			(.24	)		(.02	)		(.04	)
Diluted earnings (loss) per share (GAAP)	$	(.99	)	$	(.84	)	$	.15		$	.34		$	.09		$	(1.35	)	$	1.24		$	1.25		$	1.08
Provision for Loan Losses Reconciliation
Operating provision for loan losses	$	85,000		$	76,000		$	15,500		$	7,500		$	26,500		$	184,000		$	37,600		$	7,600		$	6,300
Special provision for fraud related loan losses		—			—			—			—			3,000			—			18,000			—			—
Provision for loan losses (GAAP)	$	85,000		$	76,000		$	15,500		$	7,500		$	29,500		$	184,000		$	55,600		$	7,600		$	6,300
Nonperforming Assets Reconciliation
Nonperforming assets excluding fraud-related assets	$	247,719		$	174,227		$	148,219		$	85,182		$	40,956		$	247,719		$	40,956		$	8,725		$	7,589
Fraud-related loans and OREO included in nonperforming assets		2,772			3,477			3,945			4,682			5,302			2,772			5,302			—			—
Nonperforming assets (GAAP)	$	250,491		$	177,704		$	152,164		$	89,864		$	46,258		$	250,491		$	46,258		$	8,725		$	7,589
Allowance for Loan Losses Reconciliation
Allowance for loan losses excluding special fraud-related allowance	$	122,271		$	111,299		$	91,035		$	89,848		$	89,423		$	122,271		$	89,423		$	47,196		$	38,655
Fraud-related allowance for loan losses		—			—			—			—			—			—			—			—			—
Allowance for loan losses (GAAP)	$	122,271		$	111,299		$	91,035		$	89,848		$	89,423		$	122,271		$	89,423		$	47,196		$	38,655
Net Charge Offs Reconciliation
Net charge offs excluding charge off of fraud-related loans	$	74,028		$	55,736		$	14,313		$	7,075		$	13,012		$	151,152		$	21,834		$	3,617		$	4,097
Fraud-related loans charged off		—			—			—			—			18,000			—			18,000			—			—
Net charge offs (GAAP)	$	74,028		$	55,736		$	14,313		$	7,075		$	31,012		$	151,152		$	39,834		$	3,617		$	4,097
Allowance for Loan Losses to Loans Ratio Reconciliation
Allowance for loan losses to loans ratio excluding fraud-related allowance		2.14	%		1.91	%		1.53	%		1.51	%		1.51	%		2.14	%		1.51	%		1.26	%		1.28	%
Portion of allowance assigned to fraud-related loans		—			—			—			—			—			—			—			—			—
Allowance for loan losses to loans ratio (GAAP)		2.14	%		1.91	%		1.53	%		1.51	%		1.51	%		2.14	%		1.51	%		1.26	%		1.28	%
Nonperforming Assets to Total Assets Ratio Reconciliation
Nonperforming assets to total assets ratio excluding fraud-related assets		2.91	%		2.16	%		1.79	%		1.02	%		.50	%		2.91	%		.50	%		.17	%		.19	%
Fraud-related nonperforming assets		.03			.04			.05			.05			.06			.03			.06			—			—
Nonperforming assets to total assets ratio (GAAP)		2.94	%		2.20	%		1.84	%		1.07	%		.56	%		2.94	%		.56	%		.17	%		.19	%
Net Charge Offs to Average Loans Ratio Reconciliation
Net charge offs to average loans ratio excluding fraud-related loans		5.09	%		3.77	%		.97	%		.48	%		.87	%		2.57	%		.38	%		.11	%		.15	%
Charge offs of fraud-related loans		—			—			—			—			1.20			—			.31			—			—
Net charge offs to average loans ratio (GAAP)		5.09	%		3.77	%		.97	%		.48	%		2.07	%		2.57	%		.69	%		.11	%		.15	%
Operating Expenses Reconciliation
Operating expenses (operating basis)	$	52,439		$	56,970		$	47,961		$	47,529		$	49,336		$	206,699		$	190,061		$	110,974		$	97,251
Merger-related charges		—			—			—			—			—			—			—			870			2,088
Operating expenses (GAAP)	$	52,439		$	56,970		$	47,961		$	47,529		$	49,336		$	206,699		$	190,061		$	111,844		$	99,339

10

UNITED COMMUNITY BANKS, INC.
Consolidated Statement of Income(Unaudited)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
(in thousands, except per share data)	2008			2007			2008			2007
Interest revenue:
Loans, including fees	$	86,409		$	121,248		$	385,959		$	482,333
Investment securities:
Taxable		18,640			18,296			74,405			64,377
Tax exempt		324			405			1,464			1,718
Federal funds sold, commercial paper and deposits in banks		2,508			336			2,880			608
Total interest revenue		107,881			140,285			464,708			549,036
Interest expense:
Deposits:
NOW		6,045			10,999			28,626			45,142
Money market		3,124			4,314			10,643			15,396
Savings		204			417			764			1,653
Time		41,512			40,934			158,268			167,400
Total deposit interest expense		50,885			56,664			198,301			229,591
Federal funds purchased, repurchase agreements and other short-term borrowings		445			6,010			7,699			16,236
Federal Home Loan Bank advances		2,358			6,275			13,026			22,013
Long-term debt		2,873			2,089			9,239			8,594
Total interest expense		56,561			71,038			228,265			276,434
Net interest revenue		51,320			69,247			236,443			272,602
Provision for loan losses		85,000			29,500			184,000			55,600
Net interest (loss) revenue after provision for loan losses		(33,680	)		39,747			52,443			217,002
Fee revenue:
Service charges and fees		7,742			8,350			31,683			31,433
Mortgage loan and other related fees		1,528			1,720			7,103			8,537
Consulting fees		1,260			2,577			7,046			8,946
Brokerage fees		645			1,064			3,457			4,095
Securities gains, net		838			1,364			1,315			3,182
Losses on prepayment of borrowings		(2,714	)		(1,078	)		(2,714	)		(2,242	)
Other		1,419			2,103			5,251			8,700
Total fee revenue		10,718			16,100			53,141			62,651
Total revenue		(22,962	)		55,847			105,584			279,653
Operating expenses:
Salaries and employee benefits		24,441			27,116			110,574			115,153
Communications and equipment		3,897			3,890			15,490			15,483
Occupancy		3,663			3,489			14,988			13,613
Advertising and public relations		1,358			1,873			6,117			7,524
Postage, printing and supplies		1,763			1,546			6,296			6,365
Professional fees		2,313			1,809			7,509			7,218
Foreclosed property		5,238			3,850			19,110			4,980
FDIC assessments and other regulatory charges		1,980			1,101			6,020			2,780
Amortization of intangibles		745			771			3,009			2,739
Other		7,041			3,891			17,586			14,206
Total operating expenses		52,439			49,336			206,699			190,061
(Loss) income before income taxes		(75,401	)		6,511			(101,115	)		89,592
Income tax (benefit) expense		(28,654	)		2,310			(37,665	)		31,599
Net (loss) income		(46,747	)		4,201			(63,450	)		57,993
Preferred stock dividends		712			4			724			18
Net (loss) income available to common shareholders	$	(47,459	)	$	4,197		$	(64,174	)	$	57,975
(Loss) earnings per common share:
Basic	$	(.99	)	$	.09		$	(1.35	)	$	1.26
Diluted		(.99	)		.09			(1.35	)		1.24
Cash dividends per common share		.00			.09			.18			.36
Stock dividends per common share		.09			.00			.18			.00
Weighted average common shares outstanding:
Basic		47,844			47,273			47,369			45,948
Diluted		47,844			47,652			47,369			46,593

11

UNITED COMMUNITY BANKS, INC.
Consolidated Balance Sheet

	December 31,			December 31,
(in thousands, except share and per share data)	2008			2007
	(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	116,395		$	157,549
Interest-bearing deposits in banks		8,417			62,074
Federal funds sold, commercial paper and short-term investments		368,609			—
Cash and cash equivalents		493,421			219,623
Securities available for sale		1,617,187			1,356,846
Mortgage loans held for sale		20,334			28,004
Loans, net of unearned income		5,704,861			5,929,263
Less allowance for loan losses		122,271			89,423
Loans, net		5,582,590			5,839,840
Premises and equipment, net		179,160			180,088
Accrued interest receivable		46,088			62,828
Goodwill and other intangible assets		321,798			325,305
Other assets		260,187			194,768
Total assets	$	8,520,765		$	8,207,302
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Deposits:
Demand	$	654,036		$	700,941
NOW		1,543,385			1,474,818
Money market		466,750			452,917
Savings		170,275			186,392
Time:
Less than $100,000		1,953,235			1,573,604
Greater than $100,000		1,422,974			1,364,763
Brokered		792,969			322,516
Total deposits		7,003,624			6,075,951
Federal funds purchased, repurchase agreements, and other short-term borrowings		108,411			638,462
Federal Home Loan Bank advances		235,321			519,782
Long-term debt		150,986			107,996
Accrued expenses and other liabilities		33,041			33,209
Total liabilities		7,531,383			7,375,400
Shareholders’ equity:
Preferred stock, $1 par value; 10,000,000 shares authorized;
Series A; $10 stated value; 25,800 and 25,800 shares issued and outstanding		258			258
Series B; $1,000 stated value; 180,000 shares issued and outstanding at December 31, 2008		173,180			—
Common stock, $1 par value; 100,000,000 shares authorized; 48,809,301 and 48,809,301 shares issued		48,809			48,809
Common stock issuable; 129,304 and 73,250 shares		2,908			2,100
Capital surplus		460,708			462,881
Retained earnings		265,405			347,391
Treasury stock; 799,892 and 1,905,921 shares, at cost		(16,465	)		(43,798	)
Accumulated other comprehensive income		54,579			14,261
Total shareholders’ equity		989,382			831,902
Total liabilities and shareholders’ equity	$	8,520,765		$	8,207,302

12

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Three Months Ended December 31,

	2008								2007
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	5,784,139		$	86,530		5.95	%	$	5,940,230		$	121,161		8.09	%
Taxable securities (3)		1,478,427			18,640		5.04			1,366,507			18,296		5.36
Tax-exempt securities (1)(3)		30,381			530		6.98			38,289			666		6.96
Federal funds sold and other interest-earning assets		369,589			2,734		2.96			79,966			645		3.23
Total interest-earning assets		7,662,536			108,434		5.64			7,424,992			140,768		7.53
Non-interest-earning assets:
Allowance for loan losses		(109,956	)							(89,797	)
Cash and due from banks		116,463								147,500
Premises and equipment		179,807								177,445
Other assets (3)		600,247								549,980
Total assets	$	8,449,097							$	8,210,120
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,534,370		$	6,045		1.57		$	1,491,091		$	10,999		2.93
Money market		424,940			3,124		2.92			483,289			4,314		3.54
Savings		174,186			204		.47			191,133			417		.87
Time less than $100,000		1,916,811			18,524		3.84			1,583,989			19,392		4.86
Time greater than $100,000		1,448,818			14,558		4.00			1,362,812			17,467		5.08
Brokered		818,100			8,430		4.10			322,963			4,075		5.01
Total interest-bearing deposits		6,317,225			50,885		3.20			5,435,277			56,664		4.14
Federal funds purchased and other borrowings		109,712			445		1.61			466,408			6,010		5.11
Federal Home Loan Bank advances		284,860			2,358		3.29			531,196			6,275		4.69
Long-term debt		146,746			2,873		7.79			143,814			2,089		5.76
Total borrowed funds		541,318			5,676		4.17			1,141,418			14,374		5.00
Total interest-bearing liabilities		6,858,543			56,561		3.28			6,576,695			71,038		4.29
Non-interest-bearing liabilities:
Non-interest-bearing deposits		665,004								716,199
Other liabilities		73,594								80,031
Total liabilities		7,597,141								7,372,925
Shareholders’ equity		851,956								837,195
Total liabilities and shareholders’ equity	$	8,449,097							$	8,210,120
Net interest revenue				$	51,873							$	69,730
Net interest-rate spread							2.36	%							3.24	%
Net interest margin (4)							2.70	%							3.73	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized losses of $3.6 million in 2008 and $799 thousand in 2007 are included in other assets for purposes of this presentation.
(4)	Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

13

UNITED COMMUNITY BANKS, INC.
Average Consolidated Balance Sheets and Net Interest Analysis
For the Twelve Months Ended December 31,

	2008								2007
	Average					Avg.			Average					Avg.
(dollars in thousands, taxable equivalent)	Balance			Interest		Rate			Balance			Interest		Rate
Assets:
Interest-earning assets:
Loans, net of unearned income (1)(2)	$	5,890,889		$	386,132		6.55	%	$	5,734,608		$	481,590		8.40	%
Taxable securities (3)		1,455,206			74,405		5.11			1,236,595			64,377		5.21
Tax-exempt securities (1)(3)		33,830			2,406		7.11			41,340			2,826		6.84
Federal funds sold and other interest-earning assets		124,261			4,026		3.24			58,357			2,124		3.64
Total interest-earning assets		7,504,186			466,969		6.22			7,070,900			550,917		7.79
Non-interest-earning assets:
Allowance for loan losses		(97,385	)							(81,378	)
Cash and due from banks		131,778								135,021
Premises and equipment		180,857								164,153
Other assets (3)		579,894								441,834
Total assets	$	8,299,330							$	7,730,530
Liabilities and Shareholders’ Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW	$	1,491,419		$	28,626		1.92		$	1,406,655		$	45,142		3.21
Money market		426,988			10,643		2.49			399,838			15,396		3.85
Savings		182,067			764		.42			188,560			1,653		.88
Time less than $100,000		1,724,036			71,844		4.17			1,619,332			79,317		4.90
Time greater than $100,000		1,457,397			62,888		4.32			1,377,915			71,467		5.19
Brokered		565,111			23,536		4.16			337,323			16,616		4.93
Total interest-bearing deposits		5,847,018			198,301		3.39			5,329,623			229,591		4.31
Federal funds purchased and other borrowings		324,634			7,699		2.37			308,372			16,236		5.27
Federal Home Loan Bank advances		410,605			13,026		3.17			455,620			22,013		4.83
Long-term debt		120,442			9,239		7.67			122,555			8,594		7.01
Total borrowed funds		855,681			29,964		3.50			886,547			46,843		5.28
Total interest-bearing liabilities		6,702,699			228,265		3.41			6,216,170			276,434		4.45
Non-interest-bearing liabilities:
Non-interest-bearing deposits		677,439								699,002
Other liabilities		68,766								72,587
Total liabilities		7,448,904								6,987,759
Shareholders’ equity		850,426								742,771
Total liabilities and shareholders’ equity	$	8,299,330							$	7,730,530
Net interest revenue				$	238,704							$	274,483
Net interest-rate spread							2.81	%							3.34	%
Net interest margin (4)							3.18	%							3.88	%

(1)	Interest revenue on tax-exempt securities and loans has been increased to reflect comparable interest on taxable securities and loans. The rate used was 39%, reflecting the statutory federal income tax rate and the federal tax adjusted state income tax rate.
(2)	Included in the average balance of loans outstanding are loans where the accrual of interest has been discontinued.
(3)	Securities available for sale are shown at amortized cost. Pretax unrealized gains of $3.3 million in 2008 and pretax unrealized losses of $8.1 million in 2007 are included in other assets for purposes of this presentation.
(4)	Net interest margin is taxable equivalent net-interest revenue divided by average interest-earning assets.

14